Battery maker Amara Raja Batteries today said it was in talks with a leading motorcycle manufacturer for supply of batteries and also planned to set up a new manufacturing facility.
Company's Managing Director Jayadev Galla said that talks with a motorcycle manufacturer for supply of batteries under original equipment manufacture (OEM) were in advanced stages.
"We are pursuing and may close [the deal] with two wheeler company very soon. Even if we supply 25-30% of the company's requirement it is huge volume.The incremental value will be significant. You know the figures of motor cycle sales," Galla said on the sidelines of a CII event.
He said the existing plant capacity would reach the optimum level soon after the latest round of expansion.
"The ground breaking [of the plant] may take place in 2013. However, the exact location has not been finalised. We are looking at several options. We are looking at multiple locations for multiple products. We may not put it all under one roof," Galla said.
However, he did not disclose any financial and capacity expansion details citing it was too early.
Galla added that the company saw big opportunity in two-wheeler sector, in which it entered three ago, in terms of replacement battery market.
He said with the new electric start feature catching up in the motorcycle segment, the replacement sales would go up as it is necessary to replace the battery once its life is over.
Commenting on the sluggish auto market, he said the market would bounce back in due course of time.
Currently, Amara Raja enjoys about 30% market share in replacement battery segment and 25-28% in four-wheeler OEM.
The company's exports, mainly to Africa and Southeast Asia, constitute around 15% of the total sales of Amara Raja.
